National Bank of Poland holds rates despite higher 2027 inflation forecast
The desk believes the National Bank of Poland (NBP) is strategically cautious by holding its reference rate steady at 3.75%, despite an upward revision in its inflation forecast for 2027. According to the commentary from ing-think, the NBP's decision aligns with slowing GDP growth indicators and limited second-round inflation effects, suggesting that significant rate hikes won't occur before early 2027. This cautious stance is critical as it reflects the NBP's commitment to maintaining economic stability while responding to shifting inflation dynamics.
What the desk is arguing
The NBP’s decision to keep rates unchanged reflects a careful balancing act between curbing inflation and fostering economic growth. Per the full note from ing-think, despite a sharp upgrade to the 2027 inflation forecast, the NBP sees little urgency to adjust its monetary policy in the short term, allowing for more data from the evolving economic landscape.
The macroeconomic environment shows a GDP growth slowdown to 3.4% year-on-year for 3Q26, down from 4.1% in 2Q26, coupled with a decline in core inflation. The MPC's assessment indicates that it will rely on incoming data related to inflation and economic activity moving forward, demonstrating a methodical approach rather than reacting preemptively to forecast changes.
Where it sits in our coverage
Our current consensus target for the EUR/PLN is 1.075, with a range from 1.04 to 1.12. Notably, the jpmorgan target of 1.10 for March 2026 reflects moderate bullish sentiment aligned with NBP's cautious outlook, while bofa's target at 1.04 suggests a more pessimistic view of the zloty’s strength against the euro.
This position aligns with the overall market sentiment favoring a steady monetary policy given the recent economic data, although some firms still anticipate earlier rate hikes than the NBP's current stance implies.
How other firms see it
Firms like jpmorgan and others reflect a consensus that the NBP will maintain its steady approach in the near term, while firms like bofa suggest a divergence in outlook with expectations of earlier tightening.
In this context, closely monitor the EUR/PLN movements as they reflect changing market perceptions of the NBP's policy stance and the broader economic backdrop. The anticipated trajectory of Polish inflation and GDP growth will likely influence these currency dynamics significantly.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01NBP holds rates steady at 3.75%, emphasizing cautious monetary policy.
- 022027 inflation forecast has been revised upward, but immediate hikes are unlikely.
- 03GDP growth is slowing, indicating a need for careful monetary management.
- 04The market has adjusted its expectations for tightening to the distant future.
Market implications
Traders should watch the EUR/PLN levels closely, particularly around 1.075, as the NBP's cautious approach may impact zloty valuations. Any emerging data reflecting economic recovery or increased inflation could shift market expectations on timing for future rate adjustments.
Risks to this view
A swift unexpected rise in inflationary pressures or substantial improvements in GDP growth could lead the NBP to reconsider its current stance on interest rates, potentially prompting earlier than anticipated rate hikes and impacting market dynamics significantly.
Articles National Bank of Poland holds rates despite higher 2027 inflation forecast Published 16:45 Poland Translate Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download The National Bank of Poland (NBP) kept rates unchanged in November despite a sharp upgrade to its 2027 inflation forecast. With the price shock still manifesting in energy and limited signs of second-round effects, we think the NBP can afford to wait, with any rate hikes unlikely before early 2027 Rafal Benecki and Adam Antoniak The National Bank of Poland kept its reference rate at 3.75% but indicated that inflation could be higher in 2027 NBP leaves rates unchanged despite high inflation expected in 2027 In line with our and market expectations, the Monetary Policy Council (MPC) left the National Bank of Poland's interest rates unchanged in November. The reference rate remains at 3.75%.
We did not share market expectations regarding the scale of rate hikes that were previously priced in, with the yield curve at some point pricing 125bp of tightening and a first hike as early as November. Little change in the MPC statement The tone of the MPC’s statement accompanying the decision was unchanged from October. The Council repeated the final two paragraphs without any changes.
It again noted that future decisions would depend on incoming information on the outlook for inflation and economic activity in Poland. The list of risk factors was also unchanged, covering fiscal policy, regulated energy prices, the economic outlook and wage growth. The MPC noted that available data point to a slowdown in GDP growth in 3Q26, as well as a decline in core inflation in October.
According to our forecasts, GDP growth eased to 3.4% year-on-year in the third quarter from 4.1% YoY in the second quarter. November projection shows higher inflation, but convergence towards target in 2028 Compared with the July projection, the inflation path for 2026-28 has been revised upwards, while the GDP trajectory remains broadly similar. The cut-off date for the projection (mid-October) once again coincided with elevated CPI readings and high commodity prices.
It captured inflation near its peak, before the October decline following the introduction of lower fuel taxes, as well as commodity prices near their highs before the post-election correction in oil and gas prices. Moreover, we do not yet know the quarterly profile of the inflation projection. It probably shows CPI declining around the turn of 2027-28 and returning towards the target.
As we have highlighted, subdued wage growth is a strong disinflationary anchor that will bring inflation lower if the energy shock fades. With a 50% probability, annual CPI inflation is projected at around 3.2% in 2026, around 4.2% in 2027 and around 2.9% in 2028, compared with 2.9%, 2.7% and 2.2%, respectively, in the July projection. Annual GDP growth, with a 50% probability, is projected at around 3.7% in 2026, around 2.9% in 2027 and around 2.8% in 2028.
The July projection put the corresponding figures at 3.7%, 2.8% and 3.0%. Inflation breakdown shows no signs of broad-based pressure or second-round effects Inflation developments in Poland so far point to a pure supply-side shock that is affecting energy prices and the prices of goods and services closely linked to energy, but there are no signs of broader price pressures spilling over across the economy. Nor do we currently see evidence of second-round effects.
Wage pressure is subdued, while slowing wage growth combined with higher fuel spending is weighing on households’ real disposable incomes. At the same time, the propensity to save remains elevated, creating a demand constraint that makes it harder for companies to raise prices. As a result, the MPC does not need to rush into interest rate hikes and can continue to monitor developments in energy markets and their impact on the domestic economy.
Based on the available preliminary October CPI data, we estimate that core inflation excluding food and energy fell below 3% for the first time since March this year. In our view, the NBP’s decision to keep rates unchanged in November suggests that the Council views elevated inflation as being driven primarily by an external supply shock. It is possible that the inflation path in the latest projection shows inflation falling towards the central bank’s target within the monetary policy horizon.
The more detailed quarterly data should show this. Possible rate hikes in early 2027 Our baseline monetary policy scenario assumes that any interest rate hikes will come no earlier than 1Q27, with a cumulative 50bp increase in rates. The latest inflation projection supports this scenario.
We see several important arguments in favour of rate hikes early next year. The longer the energy crisis persists, the greater the risk of broader price pressures emerging across the economy, something the central bank will want to contain. In addition, the new year could bring substantial increases in regulated prices for households, particularly gas prices, potentially shifting the inflation path higher, although the government has declared its readiness to intervene.
Furthermore, additional monetary tightening by major central banks, including the Federal Reserve and the European Central Bank, could increase depreciation pressure on the Polish zloty, raising import costs and potentially boosting inflation. Estimates suggest, however, that the exchange-rate pass-through to inflation in Poland is limited. Whether the rate hikes we expect in early 2027 materialise will also depend on the durability of the correction in commodity markets.
We still cannot be certain that the decline in energy prices will prove lasting. It may reflect a response to the weakening of President Trump’s political position following the midterm elections in the US, while the fundamentals of the oil and gas markets continue to point to the possibility that prices will remain high. Changes in the composition of the MPC, following the appointment of three of its members to the NBP Management Board, could delay a rate-hike decision until later in 1Q27.
NBP rates National Bank of Poland rate decision Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Authors Rafal Benecki Chief Economist, Poland Rafal Benecki is a Chief Economist at ING in Poland, joining in 2005.
Prior to this, he was the head of the Economic Analysis Bureau at Millennium Bank in Warsaw. He has an MSc in Financial… Adam Antoniak Senior Economist, Poland Adam has about 20 years of experience in macroeconomic research. He has worked for leading financial institutions in Poland (Bank Pekao, Bank BPH), and members of international financial groups… In this article NBP leaves rates unchanged despite high inflation expected in 2027 Little change in the MPC statement November projection shows higher inflation, but convergence towards target in 2028 Inflation breakdown shows no signs of broad-based pressure or second-round effects Possible rate hikes in early 2027
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